Morgans AM: Thursday, 13 May 2021

Morgans Financial Limited

Inflation fears continued to rattle Wall Street, with the session once again punctuated by heavy selling in the technology sector - Dow dropped -682-points or -1.99%, settling near its session low and logging its biggest single session percentage decline since 29 January. The broader S&P500 lost -2.14%, with Consumer Discretionary (down -3.28%) leading ten of the eleven primary sector lower. Seven primary sectors logged declines of over >2%. Energy (up +0.06%) was the only sector to eke out a rise. Domino’s Pizza Inc hit a record high (US$447.50) before settling +0.73% higher after Bill Ackman, who runs hedge fund Pershing Square Capital, said he had taken a 6% stake in the pizza company. Tesla Inc fell over >1% in the extended session (following a -4.42% fall in regular trading) after Chief Executive Elon Musk took to Twitter to announce that the company will halt sales of cars using bitcoin due to the effects on the environment that cryptocurrency mining can have. The technology-centric Nasdaq tumbled -2.67%. Europe’s second-highest court annulled a European Commission ruling that ordered online retailer Amazon.com Inc (down -2.23%) to pay €250M to Luxembourg, as part of an attempt to crack down on unfair tax breaks extended to big multinationals by European Union (EU) member states. Apple Inc fell -2.49% to US$122.77 and closed below its 200-day moving average (US$122.96) for the first time since 3 April, 2020. Apple now sits ~14.2% below its record closing high of US$143.16 set on 26 January. After the first close below the 200-DMA on 16 March, 2020, the stock fell another -7.3% to bottom out at a 6-month closing low of US$56.09 on 23 March, which was 31% below the record close at the time of US$81.80 on 12 February, 2020. Google parent Alphabet Inc (down -3.02%) and Microsoft Corp (-2.94%) also fell over >2%. The small capitalisation Russell 2000 shed -3.26%. Bankrupt car-rental company Hertz Global Holdings Inc soared 55.01% after the company unveiled a US$6B plan to help it exit chapter 11 that would benefit shareholders.